@Brian PulaskiI am having a hard time grasping how he would have the upper hand with no signed docs of any sort, nor a license at time of work.

http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.34.htm

My experience is that water damage from something like a plumbing leak is usually not worth reporting to your insurance.

The kids are home schooled so they're always home.We had a leak which we took care of, but still not much of a difference in the bill. 

Here's a link to a sample policy: https://www.civicsource.com/assets/docs/TitleInsur...I hoping someone from BP has worked with them before and can confirm that they didn't have any trouble getting their property fully insured with an underwriter on the primary market?

I do not want half fast pluming jobs that lead to leaks and issues down the road so I am willing to pay a bit extra on this trade.

Most likely a roof leak.  

Or should I file a separate tax doc stating what he is being paid?

Dogs and cats pee on laminate, hot-water humidifiers leak on it, kids start wet-mopping it when they spill something on it that they don't want Mommy to see, tenants turn off the heat when they go somewhere no matter what you write into the lease, and the stuff swells at the joints.

A family of 3 moved in and now the ceiling in the bathroom below has been leaking off an on.